Around 25% of companies named in the FTSE 250 index could in theory pay off their defined benefit (DB) pension deficits within a year using discretionary cashflow, claims research from KPMG.
Following research by the firm in April on pension deficits in the FTSE 100, the latest study shows a quarter of the 105 companies surveyed could pay off the debt in a year, while 49% could pay it off in three years by using discretionary cashflow, also called disposable corporate income. However the research points out around 28% of the companies surveyed lacked the necessary cashflow to clear their deficit and so would need to take action such as reducing capital expenditure or cutting back dividend distribution to try and clear the deficit over the medium term. KPMG says the study al...
To continue reading this article...
Join Professional Adviser for free
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes